The Impact of Minimum Wages on Wage Inequality and Employment in the Formal and Informal Sector in Costa Rica



William Davidson Institute Working Paper 479

Table 6:

Impact of Changes in the Toughness of the
Minimum Wage on Hours Worked

Range of Toughness Measure

Increase in Hours

Lowest

Median

Highest

of Work of

(30.0)

(55.5)

(89.0)

Covered Sector

0.0037

0.00141

-0.0016

Self-employed

0.0121

0.00343

-0.0080

Table 7: Impact of Minimum Wages on the Relative Level of
Employment in the Covered Sector (Percent Covered)

(1)

(2)

(3)

Toughness

0.019 *

0.0018

0.0018

(0.012)

(0.0035)

(0.0037)

(Toughness)2

3.40e-07

5.89e-06

(0.000025)

(0.00003)

Lag toughness

0.0029b

(0.0012)

Time Dummies

yes

yes

yes

Industry Dummies

yes

yes

yes

Constant

4.32 a

4.33 a

4.25a

(0.06)

(0.12)

(0.12)

Adjusted R2

019

0.89

0.90

*P=0.113

aSignificant at the 1% level; bsignificant at the 5% level;

csignificant at the 10% level.

16



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